T+1 Transition: Transforming Financial Markets Processing

Giles Elliott

Head, Business Development, Capital Markets, TCS BaNCS

Sydney Mammen

Solutions Manager, Financial Solutions, TCS BaNCS

Industry

Capital Markets

Solution

TCS BaNCS™

Highlights

The transition to T+1 settlement has amplified the need for real-time data processing systems, enabling 24/7 operations, and minimizing batch cycle delays to ensure accurate and timely trade settlements.
Enhanced end-to-end automation and AI-driven solutions, including machine learning and predictive analytics, are critical for handling the increased demands of T+1 and, improving efficiency and reducing operational risks.
The evolution of risk-based dashboards and workflow prioritization tools is essential for managing compressed processing windows and ensuring consistent, accurate trade settlements through dynamic, configurable systems.

T+1 has clearly arrived in the West although the views on how this has impacted day-to-day processing will extend globally.

Whether the firms in the industry have taken a tactical or strategic technological approach to covering this market change, the role of technology and the importance of having a highly modernized solution have never been greater.

So, how is technology playing a role? And what are the most important areas that we have seen come through in the transition to T+1 for market participants?

Firstly, the importance of real-time data has never been higher, and the technology and underlying features that drive this are critical. At the headline level, firms require real-time processing systems that can process 24/7 across global markets. With such narrow global processing windows, losing hours for batch cycles and end-of-day processing is unthinkable as an ongoing model. However, a layer below this – we get to the system features that can resolve issues automatically and ensure that the data reflected is a real-time representation - features that cover the ability to configure workflow rules, standing instructions, configured tolerances, and data normalization/translation features to minimize exception queues. There is also a priority for implementing real-time monitoring tools to track trade settlement statuses and detect any delays or discrepancies immediately after T+1 as well as automated reconciliation tools to compare trade details between counterparties, clearinghouses, and custodians to ensure consistency and accuracy in settlement instructions.

Leading from this theme is the desire for extreme levels of end-to-end automation to reduce the challenges of operations capacity planning and daily spikes in capacity demands. This talks in part about the points around rules and configurations mentioned above. However, the biggest incremental step is likely to come from the increased use of machine learning and AI, both of which have a core requirement for a strong, real-time, and accurate baseline of data but also access to historical data and the capacity to store this, potentially on the cloud, without impacting day to day system processing capacity.

Once there is a strong baseline foundation for real-time data, AI and Generative AI (GenAI) will play a significant role in automating matching processes for T+1 trades by enhancing efficiency, accuracy, and scalability. AI tools can be programmed to make real-time decisions regarding matching based on predefined rules, risk parameters, and trade characteristics. In the same vein, predictive analytics techniques can play an important role in forecasting matching rates, processing times, and potential matching failures based on historical data and current market conditions.

Enhanced operations user tools have gained a new profile with the lead up to T+1 and workload prioritization being a critical theme, the importance of risk-based dashboards and workflow prioritization tools has hit new highs due to the compression of processing windows. The expectation is that these are highly configurable to address different scenarios and client preferences, and come with dynamic analytical capabilities to assess a range of parameters that contribute to the assessment of risk.

Underlying this is the requirement to understand performance across the end-to-end processing model and the areas of delay, and exceptional process resolutions. Overlaying this is a louder industry voice calling for harmonization and adherence to market practice guidelines, and firms are being asked to increasingly track whether the desired convergence is being seen. The teams of operations performance analysts have reset the importance of these analytical engines and demand for daily insights, and this has extended the scope of technical solutions.

Quite clearly, we are seeing transformations in the financial market infrastructures and new automated solutions to deal with participant issues such as potential fails due to position shortages. This is driving its own set of innovations which in turn, need to be catered for within participant systems. Aligning to such development paths is raising the bar on market integrations and highlighting the benefits of working with partners that are highly committed to providing solutions in the capital markets industry.

About the author

Giles Elliott

Giles Elliott is the Global Head of Business Development for the Capital Markets product division at TCS BaNCS. His role encompasses developing the strategic product direction, partnership agenda, and building TCS’ profile in its target markets. He sits on the Operating Committee of ISSA. Prior to joining TCS, he spent over 20 years in banking/securities services, mainly in Asia.

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Sydney Mammen

Sydney Mammen is the Solutions Manager for TCS BaNCS suite of products with more than 25 years of experience in helping strategic growth, business development and leading transformation programs for clients on wealth, private banking, and capital markets for Major Markets (North America, LATAM, and UK&I). As a Solutions Manager, Sydney’s focus on industry trends, leveraging emerging technologies, and conceptualizing innovative solutions helps in solving customer problems as well as shaping the future leveraging TCS BaNCS solutions. His involvement in cross-functional collaboration, industry engagement, and keeping customer objectives on center has led to many successful large transformation programs in the recent past. Sydney strategically works with product management on achieving TCS BaNCS’ goals on delivering value to customers by sharing insights, prioritizing features, and refining roadmaps.

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TCS works hand in hand with world-leading investors.

TCS is here to make a difference through technology.

We’re in it for good, driving positive change for the benefit of all.

Extraordinary expertise leads to remarkable results.

Want to be a global change-maker? Join our team.

Find the latest news about TCS in our Newsroom

Recent Press releases

Recent News

Recent recognitions

Upcoming events

TCS works hand in hand with world-leading investors.

Beyond T+1 settlement - The next steps

Industry

Solution

Highlights

T+1 has clearly arrived in the West although the views on how this has impacted day-to-day processing will extend globally.

About the author

Giles Elliott

Sydney Mammen

TCS is here to make a difference through technology.

We’re in it for good, driving positive change for the benefit of all.

Extraordinary expertise leads to remarkable results.

Want to be a global change-maker? Join our team.

Find the latest news about TCS in our Newsroom

Recent Press releases

Recent News

Recent recognitions

Upcoming events

TCS works hand in hand with world-leading investors.

Industry

Solution

Highlights

T+1 has clearly arrived in the West although the views on how this has impacted day-to-day processing will extend globally.

About the author

Giles Elliott

Sydney Mammen

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